Premarket: Stocks in trouble as crises brew in Egypt, Portugal
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It'll be a shortened trading session on Wall Street today ahead of the Fourth of July holiday - but one filled with tension and volatility.

Overseas markets saw steep losses overnight amid a number of unsettling developments, including a possible government collapse in Portugal, more signs of a slowdown in China's economy, and a violent political crisis in Egypt. Several economic reports from the U.S. this morning are keeping traders on edge.

Inside the Market

North American stock futures were down more than half a percentage point earlier this morning, but have pared some losses as the open approaches. European stocks are suffering losses of almost 2 per cent.

The selling momentum kicked off early overnight, after the official Purchasing Managers Index in China's services sector weakened to 53.9 in June, down from 54.3 in May. It was just another piece of evidence that the Chinese economy is losing steam, and Hong Kong's Hang Seng index was among the biggest decliners, falling by 2.4 per cent.

Then in Europe, worries grew that Portugal's government could be headed for collapse after two cabinet ministers resigned. The nation's 10-year bond yield spiked to above 8 per cent and its main equity index tumbled 5 per cent, as the departures signalled that Portugal may not be able to implement further budget cuts as part of its bailout program. Should Portugal soften some of its austerity measures, there is concern that other countries in the euro zone could follow suit, once again putting the region's debt crisis at the forefront of the market's attention.

Meanwhile, West Texas Intermediate crude oil prices surpassed $100 (U.S.) per barrel this morning as a political power struggle continues in Egypt. President Mohammed Morsi late Tuesday rejected calls for resignation and his Islamist supporters are standing firm against those that oppose his leadership. The Egyptian military has warned it will intervene in the crisis within hours if Mr. Morsi does not put an end to it. Egypt controls the Suez Canal and crude oil traders are concerned the crisis could interrupt the millions of barrels a day of oil that is shipped from the Red Sea to Europe and North America.

Among the U.S. economic reports today are two readings on the job market - initial jobless claims and the ADP private sector jobs report. They both came in a little stronger than economists had forecast. Strong readings on the job market may not be welcomed by the Street, since they could support the Federal Reserve's plans to taper its massive bond-buying program later this year.

U.S. stock markets will close at 1 p.m. (ET) today, and the early departure may be particularly welcome in this risk-filled session.

Now, here's a closer look at what's going on this morning and what's to come.

The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities. You can also be notified using our dashboard feature when new articles appear from this author. Read more on using this feature here.

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